Relational Networks: Antidotes to DAOs and the idea that Code is Law

Code is not law. Technology is not god.

Through the lens of relational networks we can see why innovations that were supposed to spread networks, like Decentralized Autonomous Organizations (DAOs), largely failed to prove value and efficacy. DAOs failed because they were networks trying to be markets. However, through flaws in their design and implementation, they became much closer to governmental bureaucracies where everything runs on rules, where there is no flexibility, where everything is codified. They became rigid and brittle. Interestingly this was not because the humans inside them were messing things up and behaving 'too much like humans' and not enough like robots or computers. Instead it was because the design of DAOs did not (and could not) account for the relationality that is omnipresent when human networks operate.

Relationality looks like:

• People wanting to vote for the proposal of the people they liked and trusted, rather than evaluating on rational deduction alone
• Founders of protocols not wanting to release information to a sea of unknown faces
• People wanting to work in small, trusted groups instead of large, anonymous, cold factions

The relationality inherent in human networks is not bad. Neither is it necessarily bureaucratic or corrupt. DAOs were born out of a frustration with the messiness of humans and failed catastrophically because their design could not handle or account for how real networks function, which is relationally.